Shri Jagtar Singh Chawla, Noida V. ACIT, Rewari

ITA 4923/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3656 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 21-02-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 10-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K RAVI RAMCHANDRAN SENIOR
• Assessee Lawyers: S R WADHWA
• Keywords: Bonafide belief
• Section: 143(3); 54F; 234B; 54; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) SHRI C.L. SETHI, JUDICIAL MEMBER AND BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.4923/DEL./2010 (ASSESSMENT YEAR : 2007-08) SHRI JAGTAR SINGH CHAWLA, VS. ACIT, CIRCLE, S/O SHRI SARDAR SINGH CHAWLA, REWARI. C 8, SECTOR 23, NOIDA (UP) (PAN : ACVPC0038R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.R. WADHWA, ADVOCATE REVENUE BY : SHRI K. RAVI RAMCHANDRAN, SENIOR DR O R D E R PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YE AR 2007-08 ARISES OUT OF THE ORDER OF CIT (APPEALS), ROHTAK DATED 20.09.2 000. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE READ AS UNDER :- 1. THAT THE ORDER DATED 20.09.2010 PASSED BY THE LD . CIT(A) ROHTAK IS AGAINST FACTS AND BAD IN LAW. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE APPELLANT, THE LD. CIT(A) ERRED IN CONFIRMING THE A DDITION OF RS.76,85,829/- MADE BY THE ASSESSING OFFICER UND ER THE HEAD 'LONG TERM CAPITAL GAINS' DISALLOWING THE CLAI M U/S 54F OF THE INCOME-TAX ACT, 1961. 3. THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDI TION OF RS.45,36,000/- MADE BY THE ASSESSING OFFICER REPRESENTING SALE OF CROPS AND TEMPORARY STRUCTURE TO STORE ITA NO.4923/DEL./2010 2 THE CROPS STANDING ON THE AGRICULTURAL LAND SOLD TO M.S SARV SANJHI CONSTRUCTION (P) LTD. B-47, CONNAUGHT P LACE, NEW DELHI, ASSESSED BY THE AO, UNDER THE HEAD 'INCO ME FROM OTHER SOURCES' WITHOUT ANY JUSTIFICATION FOR T HE SAME. WITHOUT PREJUDICE TO THE SAID CONTENTION, THE SALE SHOULD HAVE BEEN ASSESSED UNDER THE HEAD 'AGRICULTURAL INC OME' AFTER ALLOWING THE EXPENDITURE INCURRED IN CULTIVAT ING THE SAID CROPS. 4. THE LD. CIT(A) HAS ERRED IN UPHOLDING THE LEVY O F INTEREST U/S 234B OF THE INCOME-TAX ACT, 1961 WHICH IS UNJUS TIFIED AND ILLEGAL. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR MODIFY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL AND DURING THE RELEVANT FINANCIAL YEAR, HE HAS SOLD AGR ICULTURAL LAND AND A RESIDENTIAL HOUSE LOCATED AT KARNAL. HE HAS DECLAR ED THE SALE CONSIDERATION OF RS.2.16 CRORES FOR THE AGRICULTURAL LAND AND RS.8.2 5 LACS FOR RESIDENTIAL HOUSE. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-0 8 WAS FILED ON 31.7.2007. THE ASSESSMENT U/S 143(3) WAS FINALIZED ON 24.12.20 09. 3. THE GROUND NOS.1 & 5 ARE GENERAL IN NATURE AND D O NOT REQUIRE ANY ADJUDICATION. 4. GROUND NO.2 IS RELATED TO CONFIRMATION OF ADDITI ON OF RS.76,85,829/- UNDER THE HEAD LONG TERM CAPITAL GAIN BY WAY OF N OT ALLOWING CLAIM U/S 54F OF THE INCOME-TAX ACT, 1961. 5. LEARNED AR SUBMITTED AS UNDER :- ITA NO.4923/DEL./2010 3 THE ASSESSEE HAS SOLD AGRICULTURAL LAND AND RESIDE NTIAL HOUSE AT KARNAL FOR RS.2.16 CRORES AND RS.8.25 LACS RESPECTIVELY. THE SALE CONSIDERATION HAS BEEN DECLARED AS LONG TERM CAPITAL GAIN. THE ASSES SEE CLAIMED THAT WHOLE OF THE LONG TERM CAPITAL GAIN IS EXEMPTED U/S 54F. H E PLEADED THAT THE LAND WAS PURCHASED IN 1984. THEREAFTER THE ASSESSEE MADE IM PROVEMENT IN THE LAND BY WAY OF LEVELING, DEEP BORING AND CONSTRUCTION OF SM ALL BUILDING IN WHICH AN AMOUNT OF RS.7 LACS WAS SPENT. AFTER THE SALE OF L AND, ASSESSEE APPROACHED THE MANAGER OF THE BANK TO OPEN AN ACCOUNT FOR CAPI TAL GAIN SCHEME. THE MANAGER MISLED THE ASSESSEE AND DEPOSITED THE AMOUN T IN THE FLEXI DEPOSIT SCHEME. THE ASSESSEE WAS UNDER THE BONAFIDE BELIEF /IMPRESSION THAT THE AMOUNT DEPOSITED IN FLEXI DEPOSIT SCHEME SHALL ALSO BE ENTITLED FOR BENEFITS OF CAPITAL GAIN SCHEME ACCOUNT. HE ALSO SUBMITTED THA T THE INTENTION OF THE ASSESSEE WAS ALWAYS TO REINVEST THE SALE CONSIDERAT ION FOR THE PURCHASE OF NEW ASSETS AND FINALLY THESE AMOUNTS WERE INVESTED IN P URCHASE OF NEW HOUSE AT DELHI. THE WRONG ADVICE OF THE MANAGER OF THE BANK MADE ASSESSEE TO BELIEVE THAT THE SCHEME IN WHICH AMOUNTED WAS DEPOS ITED WAS A NOTIFIED SCHEME FOR CAPITAL GAINS. HOWEVER, THE ASSESSEE IN VESTED THE CAPITAL GAIN IN THE PURCHASE OF NEW RESIDENTIAL HOUSE AT DELHI AS U NDER :- RS.28,00,000/- VIDE CHEQUE NO.100362 DATED 16.04.2 007 RS.50,00,000/- VIDE CHEQUE NO.100367 DATED 05.05.2 007 RS. 8,00,000/- VIDE CHEQUE NO.100368 DATED 12.05. 2007 RS.50,00,000/- VIDE CHEQUE NO.100369 DATED 31.05.2 007 RS.40,00,000/- VIDE CHEQUE NO.100370 DATED 30.11.2 007 RS.24,00,000/- VIDE CHEQUE NO.100374 DATED 23.04.20 08 ITA NO.4923/DEL./2010 4 THE ASSESSEE ENTERED INTO AN AGREEMENT TO PURCHASE OF A PROPERTY FOR RS.2 CRORES AND PAID RS.1.36 CRORES IN INSTALLMENTS BEFO RE THE DUE DATE OF FILING THE RETURN. THE POSSESSION OF THE PROPERTY WAS HANDED OVER TO THE ASSESSEE ON 30.3.2008 AND THE SALE DEED WAS EXECUTED ON 23.04.2 008. THIS FACT IS EVIDENT FROM PAGE 8 OF THE SALE DEED PLACED AT PAGE 43 OF T HE PAPER BOOK. THE BALANCE AMOUNT WAS ALSO INVESTED PRIOR TO THE TIME PERMISSIBLE FOR FILING RETURN U/S 139 OF THE INCOME-TAX ACT. HE PLEADED T HAT FOR CLAIMING THE EXEMPTION U/S 54F, THE ASSESSEE WAS REQUIRED TO DEP OSIT THE AMOUNT OF CAPITAL GAIN EITHER IN THE CAPITAL GAIN ACCOUNT SCHEME OR I NVEST IN THE NEW HOUSE BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME W ITHIN THE PERIOD PRESCRIBED UNDER SECTION 139. IN THIS CASE, THE DUE DATE BY WHICH THE RETURN COULD BE FILED U/S 139(4) WAS 31.3.2009 WHILE THE ASSESSEE H AS INVESTED WHOLE OF THE AMOUNT BY 23.04.2008. THEREFORE, THE ASSESSEE IS E NTITLED FOR THE BENEFIT OF CLAIM OF EXEMPTION U/S 54F OF INCOME-TAX ACT, FOR W HICH HE RELIED ON THE FOLLOWING DECISIONS :- (I) FATIMA BAI VS. ITO (2009) 32 DTR (KAR.) 243; AND (II) CIT VS. RAJESH KUMAR JALAN, 286 ITR 274 (GAU.) HE ALSO RELIED ON THE DECISION OF ITAT IN THE CASE OF P.R. KULKARNI & SONS (HUF) VS. ACIT (2011) 49 DTR (BANG.)(TRI.) 442 AND ABDUL BASHAR SIDDIQUI VS. ITO, ITA NO.3628/DEL/2009 (DELHI TRIBUNAL). THE INTENTION OF THE ASSESSEE WAS ALWAYS TO GET THE BENEFIT OF CAPITAL G AINS ACCOUNT SCHEME AND THE ITA NO.4923/DEL./2010 5 MISTAKE WAS COMMITTED BY BRANCH MANAGER. FURTHER H E SUBMITTED THAT THE POSSESSION OF THE NEW ASSET PURCHASED WAS TAKEN WIT HIN TWO YEARS FROM THE DATE OF SALE OF ASSET, THEREFORE, THE OTHER CONDITI ON FOR REINVESTMENT OF TWO YEARS PERIOD WAS FULFILLED. 6. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. HE PLEADED THAT INTERPRETATION OF SECTION 1 39 APPEARING IN SECTION 54F TO MEAN THE TIME LIMIT FOR DEPOSITING BEYOND DUE DA TE AS PER SECTION 139(1) SHALL BE AGAINST THE PROVISIONS OF LAW AND IT WILL CREATE AN ABSURD SITUATION. SUCH INTERPRETATION SHALL BE AGAINST THE PRINCIPLES LAID DOWN BY HON'BLE SUPREME COURT IN THE CASE OF STATE OF TAMILNADU VS. M.K. KANDASWAMY, 36 STC 191 (SC) WHERE THE HON'BLE SUPREME COURT HAS HE LD THAT IN INTERPRETING SUCH A PROVISION, A CONSTRUCTION WHICH WOULD DEFEAT ITS PURPOSE AND, IN EFFECT, OBLITERATE IT FROM THE STATUTE BODY, SHOULD BE ESCH EWED. IF MORE THAN ONE CONSTRUCTION IS POSSIBLE, THAT WHICH WOULD PRESERVE S ITS WORKABILITY AND ITS EFFICACY IS TO BE PREFERRED TO THE ONE WHICH WOULD RENDER IT OTIOSE OR STERILE. LEARNED DR ALSO RELIED ON THE DECISION OF HON'BLE S UPREME COURT IN CIT VS. JH GOTLA, 156 ITR 323(SC) FOR THE PROPOSITION THAT WHERE THE PLAIN LITERAL INTERPRETATION OF A STATUTORY PROVISION PRODUCES A MANIFESTLY UNJUST RESULT WHICH COULD NEVER HAVE BEEN INTENDED BY THE LEGISLA TURE, THE COURT MIGHT MODIFY THE LANGUAGE USED BY THE LEGISLATURE AND PRO DUCES A RATIONAL CONSTRUCTION. HE ALSO RELIED ON THE DECISION OF HO N'BLE SUPREME COURT IN THE ITA NO.4923/DEL./2010 6 CASE OF K.P. VARGHESE VS. ITO 131 ITR 597 (SC) WHER E THE HON'BLE SUPREME COURT EMPHASIZED THAT A STATUTORY PROVISION MUST BE SO CONSTRUED IF POSSIBLE, THAT ABSURDITY AND MISCHIEF MAY BE AVOIDED. HE ALS O RELIED ON RBI VS. GENERAL FINANCE & INVESTMENT CO. (1987) 61 COMP CAS ES 663 (SC) FOR THE PROPOSITION THAT INTERPRETATION MUST DEPEND ON THE TEXT AND THE CONTEXT. THEY ARE BASIS OF THE INTERPRETATION. HE ALSO RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SULTANA BEGUM VS. PREM CHAND JAIN (1997) 1 SCC 373 FOR THE PROPOSITION THAT THE RULE OF INTERP RETATION REQUIRES THAT WHILE INTERPRETING TWO INCONSISTENT OR OBVIOUSLY REPUGNAN T PROVISION OF AN ACT, THE COURT SHOULD MAKE AN EFFORT TO SO INTERPRET THE PRO VISION AS TO HARMONIZE THEM SO THAT THE PURPOSE OF THE ACT MAY BE GIVEN EF FECT TO AND BOTH THE PROVISIONS MAY BE ALLOWED TO OPERATE WITHOUT RENDER ING WITHER OF THEM OTIOSE. FINALLY HE SUBMITTED THAT IN THE CASE OF R AJESH KUMAR JALAN WHICH WAS RELIED BY THE ASSESSEE, IT IS HELD THAT STATUT ORY ENACTMENTS MUST ORDINARILY BE CONSTRUED ACCORDING TO ITS PLAIN MEAN ING AND NO WORDS SHALL BE ADDED, ALTERED OR MODIFIED UNLESS IT IS PLAINLY NEC ESSARY TO DO SO TO PREVENT A PROVISION FROM BEING UNINTELLIGIBLE, ABSURD, UNREAS ONABLE, UNWORKABLE OR TOTALLY IRRECONCILABLE WITH THE REST OF THE SAME. IN VIEW OF THE ABOVE, IT IS RESPECTFULLY SUBMITTED THAT IN ORDER TO MAKE THE PR OVISIONS OF SECTION 54F SENSIBLE, WORKABLE AND RATIONAL, A HARMONIOUS READI NG OF BOTH THE LIMBS OF SUB-SECTION (4) IS NECESSARY. THAT IS SECTION 139 THAT APPEAR IN THE FIRST LIMB ITA NO.4923/DEL./2010 7 OF THE SECTION 54F(4) SHOULD READ IN CONTEXT OF DUE DATE AS PER SECTION 139(1) MENTIONED IN THE SECOND LIMB. IN OTHER WORDS, SECT ION 139 MENTIONED IN THE FIRST LIMB OF SECTION 54F(4) WOULD IMPLIEDLY MEAN O NLY THE RETURN OF INCOME FILED IN THE NORMAL COURSE U/S 139(1) IN ORDER TO B E CONSONANT WITH THE TIME LIMIT PROVIDED IN THE SECOND LIMB FOR DEPOSITING TH E NET SALE CONSIDERATION BEFORE THE DATE U/S 139(1). LEARNED DR FINALLY SUB MITTED THAT WITHOUT PREJUDICE TO THE ABOVE, IT IS RESPECTFULLY SUBMITTE D THAT FREQUENT CHANGES IN STAND/EXPLANATIONS OFFERED BY ASSESSEE AND HIS CONT UMACIOUS BEHAVIOR ON THIS ISSUE AS WELL AS OTHER ISSUES INVOLVED IN THIS ASSE SSMENT DO NOT ENTITLE HIM FOR ANY LIBERAL APPROACH/CONCESSION. 7. AFTER HEARING BOTH THE SIDES ON THE ISSUE, WE HO LD AS UNDER :- THE ASSESSEE HAS SOLD AGRICULTURAL LAND AND A RESI DENTIAL HOUSE FOR RS.2.16 CRORES AND RS.8,25,000/- RESPECTIVELY LOCAT ED AT KARNAL. THERE IS NO DISPUTE REGARDING THIS FACT THAT THE ASSESSEE HAS E ARNED LONG TERM CAPITAL GAINS. FIRST DISPUTE IS REGARDING THE INVESTMENT OF THE LO NG TERM CAPITAL GAIN IN THE FLEXI DEPOSIT SCHEME IN THE BANK. THE ASSESSEE CLA IMS THAT HE HAS HANDED OVER THE CHEQUES TO THE BRANCH MANAGER TO DEPOSIT THE SA ME IN CAPITAL GAIN SCHEME ACCOUNT BUT HE INVESTED IN THE FLEXI DEPOSIT SCHEME OF THE BANK ALTHOUGH THE ASSESSEES INTENTION WAS ALWAYS TO INVEST IN THE CA PITAL GAIN SCHEME ACCOUNT. THE ASSESSEE WAS ALWAYS UNDER THE BONAFIDE BELIEF T HAT THE AMOUNT HAS BEEN INVESTED IN THE CAPITAL GAIN SCHEME ACCOUNT ONLY. THE COPY OF LETTER WRITTEN ITA NO.4923/DEL./2010 8 BY THE ASSESSEE TO THE BRANCH MANAGER FOR FORWARDIN G THE CHEQUES SHOWS THAT THE INTENTION OF THE ASSESSEE WAS TO INVEST IN CAPI TAL GAIN SCHEME ACCOUNT (COPY PLACED AT PAGE 20 OF THE PAPER BOOK). THE RE QUEST MADE TO THE BANK MANAGER WAS TO OPEN A CAPITAL GAIN SCHEME ACCOUNT. THIS INTENTION OF ASSESSEE WAS ALWAYS TO REINVEST IN THE SCHEME WHICH QUALIFY FOR THE EXCEPTION OF CAPITAL GAIN TAX. FURTHER, THE ASSESSEE HAS IN VESTED RS.2 CRORES IN THE PURCHASE OF THE NEW HOUSE BY 23.04.2008. THE HON'B LE KARNATAKA HIGH COURT IN THE CASE OF FATHIMA BAI VS. ITO, CITED SUP RA, HAS HELD AS UNDER :- SEC. 54(2) DECLARES THAT WITHIN ONE YEAR FROM THE DATE OF TRANSFER IF THE CAPITAL GAIN IS NOT INVESTED IN PUR CHASE OF BUILDING, THE ASSESSEE SHOULD DEPOSIT THE AMOUNT IN THE 'CAPITAL GAIN ACCOUNT SCHEME' OR ELSE THE ASSESSEE SHOULD IN VEST THE CAPITAL GAINS BEFORE FILING OF RETURN WITHIN THE PE RMITTED PERIOD UNDER S. 139, IN WHICH EVENT, THE ASSESSEE WILL NOT BE LIABLE TO PAY CAPITAL GAIN TAX. IN THE INSTANT CASE, THE DUE DATE FOR FILING OF RETURN IS 30TH JULY, 1988. UNDER S. 139(4) THE A SSESSEE WAS ENTITLED TO FILE RETURN IN THE EXTENDED TIME, WHICH IS WITHIN 31ST MARCH, 1990. THE ASSESSEE DID NOT FILE THE RETURN W ITHIN THE EXTENDED DUE DATE, BUT FILED THE RETURN ON 27TH FEB ., 2000. HOWEVER, THE ASSESSEE HAD UTILISED THE ENTIRE CAPIT AL GAINS BY PURCHASE OF A HOUSE PROPERTY WITHIN THE STIPULATED PERIOD OF S. 54(2) I.E., BEFORE THE EXTENDED DUE DATE FOR RETURN UNDER S. 139. THE ASSESSEE TECHNICALLY MAY HAVE DEFAULTED IN NOT FILING THE RETURN UNDER S. 139(4). BUT, HOWEVER, UTILISED THE CAPITAL GAINS FOR PURCHASE OF PROPERTY BEFORE THE EXTENDED DUE DA TE UNDER S. 139(4). THE CONTENTION OF THE REVENUE THAT THE DEPO SIT IN THE SCHEME SHOULD HAVE BEEN MADE BEFORE THE INITIAL DUE DATE AND NOT THE EXTENDED DUE DATE IS AN UNTENABLE CONTENTIO N.-CIT VS. RAJESH KUMAR JALAN (2006) 206 CTR (GAU) 361 :(2006) 286 ITR 274 (GAU) CONCURRED WITH. IN THE ASSESSEES CASE, THE AMOUNT HAS BEEN INVESTE D PRIOR TO THE DUE DATE BY WHICH THE RETURN COULD BE FILED U/S 139 OF THE ACT. A SIMILAR VIEW HAS ALSO ITA NO.4923/DEL./2010 9 BEEN HELD IN THE CASE OF CIT VS. RAJESH KUMAR JALAN , CITED SUPRA, BY THE HON'BLE GAUHATI HIGH COURT WHEREIN THE HON'BLE HIGH COURT HAS HELD AS UNDER :- INTERPRETATION OF STATUTES-BENEFICIAL PROVISION-PU RPOSIVE CONSTRUCTION-IN CONSTRUING BENEFICIAL ENACTMENT, TH E VIEW THAT ADVANCES THE OBJECT OF THE ENACTMENT AND SERVES ITS PURPOSE MUST BE PREFERRED TO THE ONE WHICH OBSTRUCTS THE OB JECT AND PARALYSES THE PURPOSE OF THE BENEFICIAL ENACTMENT-K UNAL SINGH VS. UNION OF INDIA (2003) 4 SCC 524 APPLIED. CAPITAL GAINS-EXEMPTION UNDER S. 54 - TIME-LIMIT FO R MAKING DEPOSIT UNDER THE SCHEME - ONLY S. 139 IS MENTIONED IN S. 54(2) - SEC. 139 CANNOT MEAN ONLY S. 139(1) BUT MEANS ALL SUB- SECTIONS OF S. 139 - THEREFORE, ASSESSEE CAN FULFIL THE REQUIREMENT OF S. 54 OF DEPOSITING THE UNUTILIZED P ORTION OF THE CAPITAL GAIN ON SALE OF RESIDENTIAL PROPERTY IN NOT IFIED SCHEME UPTO THE EXPIRY OF TIME-LIMIT FOR FILING RETURN UND ER S. 139(4). IN THE CASE OF ABDUL BASHAR SIDDIQUI (SUPRA), THE I TAT, DELHI BENCH FOLLOWED THE JUDGMENTS OF GAUHATI HIGH COURT AND KA RNATAKA HIGH COURT AND ALLOWED EXEMPTION U/S 54F BY HOLDING AS UNDER :- 'IT IS, THUS, CLEAR THAT ASSESSEE MADE INVESTMENT I N THE NEW HOUSE BEFORE THE DATE BY WHICH RETURN COULD BE FILE D U/S 139(4) OF THE ACT. IN THE SUB SECTION (4) OF SECTION 54F, THE ONLY SECTION MENTIONED IS SECTION 139, WHICH CANNOT BE M EANT ONLY SECTION 139(1) BUT IT WOULD MEAN ALL SECTIONS OF 13 9 OF THE ACT AS WAS HELD BY THE HON'BLE GAUHATI HIGH COURT IN TH E CASE OF RAJESH KUMAR JALAN (SUPRA). THEREFORE, RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF HON'BLE GAUHATI HIGH COUR T IN THE CASE OF CIT V. RAJESH KUMAR JALAN (SUPRA), WE HOLD THAT ASSESSEE HAS SATISFIED THE CONDITION OF MAKING INVE STMENT IN HOUSE WITHIN THE PERIOD SPECIFIED U/S 54F OF THE AC T AND CONSEQUENTLY, ASSESSEE SHALL BE ENTITLED TO DEDUCTI ON AVAILABLE TO HIM U/S 54F OF THE ACT. THE AO SHALL RE-COMPUTE THE CAPITAL GAIN ACCORDINGLY AFTER PROVIDING REASONABLE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. WE ORDER ACCORDINGLY. ITA NO.4923/DEL./2010 10 IN THE CASE OF P.R. KULKARNI & SONS (HUF) (SUPRA), THE AO DID NOT ALLOW EXEMPTION U/S 54F ON THE GROUND THAT NET CONSIDERAT ION WAS NOT DEPOSITED IN THE CAPITAL GAIN ACCOUNT SCHEME. THE ITAT, BANGALOR E BY FOLLOWING ITS OWN DECISION IN THE CASE OF NIPUN MEHROTRA V. ACIT (200 8) 237 ITR 110 (BANG)(AT) AND JUDGEMENTS OF GAUHATI HIGH COURT AND KARNATAKA HIGH COURT (SUPRA) HELD THAT ASSESSEE WAS ENTITLED TO EX EMPTION OF THE ENTIRE INVESTMENT UPTO THE DATE OF FILING THE RETURN U/S 1 39(4) OF THE ACT. THE ASSESSEES CASE IS SQUARELY COVERED BY THE ABOVE FO UR JUDGEMENTS INCLUDING ITAT, DELHI BENCH. THEREFORE, THIS GROUND OF ASSES SEES APPEAL IS ALLOWED. 8. IN THE GROUND NO.3, THE ISSUE RAISED IS REGARDIN G THE ADDITION OF RS.45,36,000/-. 9. ON THIS ISSUE, THE LEARNED AR SUBMITTED THAT THE ASSESSEE HAS RECEIVED THIS AMOUNT IN LIEU OF OTHER RESIDUAL THINGS AVAILA BLE ON THE LAND WHICH WAS SOLD. HE SUBMITTED THAT WHEN THE AGRICULTURAL LAND WAS SOLD IT WAS HAVING THE CROPS OVER IT AND PART OF AMOUNT RECEIVED FOR THE S AME. IT IS ALSO CLAIMED THAT THE PAYMENTS WERE AS PER AGREEMENT DATED 20.6.2006. IT IS CLAIMED THAT THERE WAS A DERA, PUCCA DRAINS, BRICK FLOORING FOR APPROA CH ROAD, BARBED WIRE FENCING ALL AROUND THE LAND, CROPS. FOR THE CROPS OF VEGETABLES AND FRUITS, THE ASSESSEE HAS RECEIVED RS.13,90,000/-. HE ALSO CLAI MED THAT THE AMOUNT OF RS.18,80,000/- WAS ALSO RECEIVED FOR SETTLEMENT OF LABOURERS AND HE PLEADED ITA NO.4923/DEL./2010 11 THAT IT SHOULD NOT BE ASSESSED AS INCOME FROM OTHER SOURCES. THE DETAILS SUBMITTED ARE AS UNDER :- SL.NOS. I T E M S AMOUNT OF COMPENSATION 01. DERA (2 ROOMS 15X12 EACH) HAND PUMP & BOUNDARY WALL MEASURING 30X40 SQ.YARDS = 120 SQ.YARDS =1 140 YARD IN LENGTH AND 2 YARD HIGH 7,00,000.00 02. PUCCA DRAINS 1,00,000.00 03. BRICK FLOORING FOR APPROACH ROAD 65 YARDS 1,70,000.00 04. BARBED WIRE FENCING ALL AROUND THE LAND 4.50 ACRES 3,00,000.00 05. CROPS (I) POTATO (II) SHIMLA MIRCH (III) BANANA (IV) PAPAYA (V) SONJNA FALI (VI) BANS 3,00,000.00 3,00,000.00 1,50,000.00 4,00,000.00 40,000.00 2,00,000.00 06. SETTLEMENT OF LABOURS (20 LABOURS FROM BIHAR, JHARKHAND & M.P. WAS RESIDING ON THE LAND SINCE 6 YEARS BACK. THEY REMOVED AFTER PAYMENT OF COMPENSATION RS.94,000/- PER LABOUR) 18,80,000.00 TOTAL 45,40,000.00 10. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND PLEADED THAT IT WAS INCOME FROM OTHER SOU RCES. 11. WE HAVE HEARD BOTH THE SIDES AND CAREFULLY PERU SED THE RECORDS ON THE ISSUE. THE AMOUNT WAS RECEIVED OF RS.9,07,200/- AN D RS.36,28,800/- ON 14.3.2006 AND 24.6.2006. THE ASSESSEE HAS SUBMITTE D THE DETAILS OF THE COMPENSATION. IT IS CLAIMED AS PAID AS PER AGREEME NT DATED 20.6.2006. HOWEVER, THE FACTS OF THE CASE SUGGEST DIFFERENTLY. FIRSTLY, IN THE FIRST ITA NO.4923/DEL./2010 12 INSTANCE, THE ASSESSEE CLAIMED THAT IT WAS A COMPEN SATION RECEIVED IN LIEU OF FRUITS AND OTHER RESIDUALS AVAILABLE ON THE LAND. HOWEVER, IN THE CHART GIVEN, THE ASSESSEE HAS CLAIMED THAT RS.7 LACS WAS TOWARD S THE DERA AND HAND-PUMP AND BOUNDARY WALL, RS.1 LAC FOR PUCCA DRAINS, RS.1, 70,000/- FOR BRICK FLOORING FOR APPROACHING ROAD, RS.3 LACS FOR BARBED WIRE FEN CING ALL AROUND THE LAND, RS.13,90,000/- FOR VARIOUS CROPS INCLUDING POTATO, SHIMLA MIRCH, BANANA, PAPAYA, SONJNA FAIL, BANS AND RS.18,80,000/ FOR SET TLEMENT OF LABOURERS. THESE CLAIMS ARE NOT SUPPORTED BY ANY RELIABLE EVIDENCE. THESE ARE ONLY BASED ON ASSESSEES CLAIM. THE AMOUNT WAS RECEIVED FROM M/S . SARV SANJHI CONSTRUCTION PVT. LTD. TO WHOM THE ASSESSEE HAD SOL D THE LAND ON 14.3.2006 AND 24.6.2006. THE SALE DEED WAS EXECUTED ON 23.4. 2008. THE CLAIM FOR INVESTMENT IN RESPECT OF DERA, HAND-PUMP, BOUNDARY WALL, PUCCA DRAIN AND BRICK FLOORING MUST HAVE BEEN SUPPORTED BY VOUCHERS FOR EXPENDITURE AND DEBITS IN BOOKS OF ACCOUNTS AND DATE OF INVESTMENT/ EXPENDITURE AND MUST HAVE BEEN REFLECTED IN THE BOOKS OF ACCOUNT. NO SUCH EV IDENCES WERE SUBMITTED IN THIS REGARD. FURTHER THE ASSESSEE HAS ALSO NOT FUR NISHED RELIABLE EVIDENCE IN RESPECT OF THE CLAIM OF COMPENSATION FOR CROP OF VE GETABLES/FRUITS. THE RECORDS MAINTAINED BY THE REVENUE AUTHORITIES SHOW THAT THE RICE WAS GROWN IN THE JUNE, 2006, THEREFORE, THE CLAIM OF THE ASSESSE E REGARDING VARIOUS CROPS STANDING FOR WHICH THE COMPENSATION SHOWS AS RECEIV ED IS UNSUSTAINABLE CLAIM. SIMILARLY, THERE IS NO RELIABLE EVIDENCE IN RESPECT OF THE CLAIM MADE FOR ITA NO.4923/DEL./2010 13 THE COMPENSATION OF THE LABOURERS. IN ABSENCE OF A NY EVIDENCE IN THIS REGARD AND WITH THE FACT THAT THE AMOUNT WAS RECEIVED AT A ND AROUND THE TIME OF SALE OF THE LAND FROM THE SAME PERSON, WE ARE OF THE VIE W THAT THIS WAS THE SALE CONSIDERATION RECEIVED TOWARDS THE SALE OF THE LAND . THE SURROUNDING CIRCUMSTANCES ALSO SHOW THAT THIS AMOUNT RECEIVED T OWARDS THE SALE CONSIDERATION OF LAND. FOR HOLDING SO, WE GET THE SUPPORT FROM THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF DINESH KUMAR MITTAL VS. ITO REPORTED IN 193 ITR 770 WHERE THE HON'BLE HIGH COUR T HAS HELD THAT THERE IS NO RULE OF LAW TO THE EFFECT THAT THE VALUE DETERMI NED FOR THE PURPOSE OF STAMP DUTY IS THE ACTUAL CONSIDERATION PASSING BETWEEN TH E PARTIES TO A SALE. THE ACTUAL CONSIDERATION MAY BE MORE OR MAY BE LESS. W HAT IS THE ACTUAL CONSIDERATION THAT PASSED BETWEEN THE PARTIES IS A QUESTION OF FACT TO BE DETERMINED IN EACH CASE, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE. AS WE HAVE STATED ABOVE, THE FACTS AND CIRCU MSTANCES OF THE CASE SHOW THAT THIS AMOUNT OF RS.45,36,000/- WAS RECEIVED TOW ARDS THE SALE CONSIDERATION IN ADDITION TO THE AMOUNT DECLARED IN THE SALE DEED. THE REVENUE RECORDS SHOW THAT THE RICE WAS BEING GROWN IN 2006 WHEN THE SALE WAS NEGOTIATED. THEREFORE, A DEDUCTION OF RS.30,00 0/- PER ACRE SHALL BE ALLOWED TOWARDS THE COMPENSATION FOR THE STANDING C ROPS AT THE LAND SOLD OUT. IN THE INTEREST OF JUSTICE AND EQUITY, WE HOLD THAT THE ASSESSEE SHALL BE AT LIBERTY TO CLAIM THE BENEFIT OF THE COST INCURRED F OR DEVELOPING THE AGRICULTURAL ITA NO.4923/DEL./2010 14 LAND BY WAY OF MAKING DERA, HAND-PUMP, PUCCA DRAINS , FLOORING, FENCING AND COMPENSATION FOR LABOURERS, ETC., IF NECESSARY EVID ENCES ARE FILED BEFORE THE ASSESSING AUTHORITY. IN THE RESULT, GROUND NO.3 OF THE ASSESSEES APPEAL IS SET ASIDE TO THE FILE OF ASSESSING OFFICER WITH ABOVE O BSERVATIONS. 12. GROUND NO.4 IS REGARDING THE LEVY OF INTEREST U /S 234B OF THE INCOME- TAX ACT. AFTER HEARING BOTH THE SIDES, WE HOLD THA T LEVYING OF INTEREST IS MANDATORY IN VIEW OF THE DECISION OF HON'BLE SUPREM E COURT IN ANJUM GHASWALA 252 ITR 1. THEREFORE, THE SAME STANDS DIS MISSED. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 30 TH DAY OF JUNE, 2011. SD/- SD/- (C.L. SETHI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 30 TH DAY OF JUNE, 2011 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A), ROHTAK. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.